President Prabowo: Economic Independence Key to Resilience Against Global Shocks

JAKARTA, KOMPAS — The government's development focus, which targets self-sufficiency in food and energy, is believed to strengthen Indonesia's economic resilience against various global economic shocks, one of which is caused by the United States' import tariff policies.

This was conveyed by President Prabowo Subianto during an event titled "Economic Symposium with the President of the Republic of Indonesia: Strengthening Indonesia's Economic Resilience Amid the Wave of Trade Tariff Wars" at Menara Mandiri, Jakarta, Tuesday (8/3/2025).

This event was attended by the ranks of coordinating ministers, ministers, and deputy ministers of the Red and White Cabinet, including Coordinating Minister for Economic Affairs Airlangga Hartarto, Minister of Finance Sri Mulyani Indrawati, Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia, Minister of Trade Budi Santoso, Minister of Foreign Affairs Sugiono, Deputy Minister of State-Owned Enterprises Kartika Wirjoatmodjo, and Deputy Minister of Industry Faisol Riza.

Also present were the Chairman of the National Economic Council (DEN) Luhut Binsar Pandjaitan, Governor of Bank Indonesia Perry Warjiyo, Chairman of the Financial Services Authority (OJK) Board of Commissioners Mahendra Siregar, Chairman of the Deposit Insurance Corporation (LPS) Board of Commissioners Purbaya Yudhi Sadewa, Head of the Investment Management Agency (BPI) Danantara Rosan Roeslani, and Head of the National Nutrition Agency Dadan Hindayana.

The seminar was also attended by professors in the field of economics, economists, and representatives from economic associations and business sectors, including the Indonesian Employers Association (Apindo), the Indonesian Farmers Harmony Association (HKTI), and the Indonesian Young Entrepreneurs Association (Hipmi).

To hundreds of seminar participants, the President reminded that Indonesia's economy operates based on Pancasila and the 1945 Constitution (UUD 1945). Article 33 of the 1945 Constitution stipulates that the national economy is founded on the principle of mutual cooperation.

"I repeat, the foundation of our economy is based on kinship. No one should go hungry in a Republic (of Indonesia) that has been independent for 80 years. No one should live under a bridge. This pierces the sense of justice. No one should go without food. This is the basis for us (the government) in formulating strategies (policies)," he stated.

The President added that the foundation of the nation's economic policy, based on justice and the principle of kinship, aligns with the Sustainable Development Goals (SDGs). Food self-sufficiency, energy self-sufficiency, water management, and industrialization are the main targets of the current cabinet's economic policy.

By focusing on pursuing the policy target, the President is optimistic that the national economy will not be shaken by the US import tariff increase policy aimed at many countries, causing global uncertainty. As long as it can meet its needs independently, the President believes that the Indonesian economy has the resilience to global uncertainty.

"Our nation's founders, including me, have long reminded us to build our economy with the goal of standing on our own two feet," the President emphasized.

Meanwhile, Airlangga Hartarto explained that amid global uncertainty, several domestic economic indicators still show that the Indonesian economy is resilient. He stated that economic growth in the fourth quarter of 2024 reached 5.03 percent, with two provinces, namely West Papua and North Maluku, recording the highest rates.

"This is all due to downstreaming, and also the biggest contribution is in the sector that the President mentioned earlier, the industrial or manufacturing sector, which is almost 19 percent of GDP (gross domestic product)," he said.

In terms of inflation, Airlanggani continued, it is under control. Today's inflation has been reported at over 1 percent, or one of the lowest in the world. Meanwhile, in terms of the consumer confidence index, it is still high at 126.4 above 100, consumers are still showing optimism.

The balance of payments in 2024 recorded a surplus of 7.2 billion US dollars. Furthermore, until February 2024, credit growth was also relatively good at 10.4 percent, with growth in third-party funds or public deposits or funds placed in banking above 5 percent above economic growth.

"We also still have quite thick foreign exchange reserves, namely 154 billion US dollars and enough for 6.4 months of import costs and also for debt payments," he said.

Meanwhile, Sri Mulyani Indrawati acknowledged that the US import tariff policy has changed the global economic landscape. When US President Donald Trump on April 1, 2025 issued an Executive Order in the form of imposing a 10 percent import tariff on Canada and a 25 percent import tariff on Mexico, it has changed the order of all world friendships.

Not long after that, there was retaliation or response and additional threats for certain products such as steel and aluminum. Then came the new Executive Order on April 4 where Trump increased tariffs on Chinese products by 20 percent and Canada retaliated.

"This timeline illustrates that in just one month, the world that was previously governed by rule-based, now has no more certainty," said Sri Mulyani.

However, to face global pressure, the government has resources in the form of state finances, State-Owned Enterprises (BUMN), and BPI Danantara to maintain national economic resilience.

According to him, all these resources must be managed in a coordinated and synergistic manner to create added value, strengthen competitiveness, maintain sovereignty and economic resilience in an increasingly complex and dynamic global situation.